Hello everyone, today we’re talking with Josh Pigford, founder of Baremetrics. Josh had an interesting entrepreneurial journey that led him to the discovery of Baremetrics, which is a data analytics product startups love – it integrates with Stripe to track things like recurring revenue, churn, and average revenue per user. He’s got some interesting insights on what’s made his company successful and the pros and cons of running a fully transparent business.

How a Life-Long Product Builder Stumbled onto an Idea that Struck Gold

Josh started building things for himself in high school, which led to doing work for others. It started off as design work for bands, but led him to his desire to build things for himself, sparking his entrepreneurial spirit.

For a long time, he split his working days between building products for clients and for himself.

In October 2013, he had two survey-focused SaaS products that both used Stripe, and came up with an idea for a product he could build to give those two products a kick in the pants to make more money.

Tracking data like revenue and churn was really difficult with generic analytics platforms, but he noticed that he could pull all the data he needed from Stripe, so he built a dashboard (Baremetrics) that would help him make business decisions based on that data.

He put it out in the market to see what would happen, and it really struck a chord with other startups – so much so that he’s been able to drop his other two products, wrap up the work he was doing for other clients, and focus 100% on Baremetrics for almost a year.

Business Growth & a Boost from Buffer

As of December 2014, Baremetrics had close to $27,000 in recurring monthly revenue and 280-300 users with six full-time employees.

One thing that helped skyrocket their growth was when Buffer (a much larger company than Baremetrics) released their Baremetrics dashboard publicly in February 2014, totally changing the trajectory of their growth.

What Large, Fast Growth Meant to the Founder

Within five months, Baremetrics went from making $0 to making $5,000 per month.

Initially, Josh didn’t have any large or special plans for Baremetics – he just thought it would be another tool in his toolbox that would make a decent amount of money combined with his other two products.

And though he’s always been the type of guy that likes to juggle a lot of things, the growth has affected how close he is to the product.

“I’m still really close to the product for sure,” he says, “but I’m not designing and developing like I was in the early days.”

Now he has to spend more time on higher-level company stuff like one-on-one meetings with his staff, and doing all the administrative work required to make sure everyone’s equipped to do their jobs.

Josh built the first version of the product himself within about seven days of working hours spread out over a month. He had the idea on October 14th and launched on November 14th.

In fact, their first 10 customers all came from Twitter and some of his startup buddies who had companies.

He didn’t do the usual pre-launch buildup of collecting emails and blogging to drum up hype. Instead, he just thought, “Okay, I think I’ll launch this today.”

“And I sent out a tweet,” he said. “That was my launch.”

And within a month, Baremetrics was brining in a couple thousand dollars per month in recurring revenue.

Moving to a Single Point of Focus

In the past, Josh said he liked to have different projects going on because he saw it as a way to diversify his revenue. He wasn’t tied to just one thing, so if one project flopped, he wasn’t completely out of money.

“In hindsight, that was sort of a cop-out,” he said.

But now that he’s giving 100% of his focus on one thing, the difference is that he can think more clearly about a given problem and let his thought processes work themselves out subconsciously since he’s not constantly jumping from one thing to another anymore.

He said not having so many things take up space in his brain has been a game-changer because he can think more clearly.

And even though all of his eggs are now in one basket so to speak, he said Baremetrics isn’t at any kind of desperate point that he needs to worry. At this point, he says it’s just a matter of not making idiotic decisions.

How They’re Landing New Customers

Josh points out three main ways Baremetrics gets people on their site to hopefully turn into customers:

“I think most companies that have a free plan give away too much,” says Josh, “and they don’t need the free plan, but they feel like that have to because that’s just what you do.”

He says he can understand free trials if a SaaS company is offering a product that can take a while to set up, because convincing people to pay for something before they’re able to see value from it is a big thing to ask.

However, he feels that people should start paying for a product or service as soon as they start reaping value from it. For example, with Baremetrics, all you have to do is connect your Stripe account and you get value immediately, so they don’t offer free trials.

The Pros & Cons of Total Business Transparency

As a totally transparent business that makes its own dashboard public, Baremetrics has noticed a few drawbacks, one of the biggest ones being a dozen or so “me too” businesses that have ripped off their idea, even to the point have having the exact same design and layout in their dashboards.

It’s also opened them up for scrutiny from potential customers who don’t like the looks of their churn rates and therefore won’t sign up for the service.

But from a marketing perspective, especially when serving startups, Josh said being transparent has helped them exponentially.

For starters, the Buffer deal would have never happened if their numbers weren’t public.

And since other startup founders are obsessed with checking in on the growth of other companies, their dashboard gets shared a lot, which in turn spreads the word.

Pricing to Avoid Single-Digit Plans

Even though he pulled the exact numbers out of thin air, Josh says that he knew from past experience that he didn’t want to set up his pricing scheme to have a bunch of people on low-paying plans… he knew he wanted the average revenue per user to be at least $50.

To make that happen, he tipped the pricing scales towards more expensive plans. The cheapest one is $29, but it goes up to $79, $149, $249, and a bunch of enterprise-level plans that are even more expensive.

By doing this, he self-segmented his product towards businesses that were legit rather than businesses that didn’t have any extra money to spend, but were still really demanding.

If Your Business is Dying, Take a Hint

Josh says that building a business might be slow-moving, but it really shouldn’t be all that difficult if you’re really solving a tangible problem.

From his own personal experience, he says that most business founders usually aren’t honest enough with themselves to admit their business idea isn’t all that great. But ultimately, it comes down to what you want to get out of the business.

He advises that if you want a business you can live off of, then at a base level, there’s some things you’ve got to pay attention to in order to find out if your business is worth the effort.

For example, it might be time to throw in the towel if your user churn is over 25% per month, or you’re a couple years in and still only making a thousand dollars per month.

He says that if you’re one year into your business and you feel like you have to fight for every single customer you get, then it’s probably time to go back to the drawing board.

The Biggest Struggle in Growing Baremetrics

The hardest time Josh went through when growing Baremetrics was right before he hired his first employee.

He was having problems with infrastructure scaling and he didn’t have the knowledge he needed to deal with servers and scale a product that held and processed so much data. For six weeks, he was staying up late every single night to put out fires and keep Baremetrics afloat.

Fortunately, he hired a backend engineer that saved his tail and got the company back on track.

Advice to His 25-Year-Old Self

Josh says that he’d probably advise himself to have less of an ego. When he was 25, he was proud of the fact that he could build products all by himself, but he says it’s so much nicer now that he’s got a team built around a project.

One Productivity Hack

“Try not to multi-task.”

He says that whenever he tries to juggle too many things, he ends up dropping them all and never does a great job on any of them.

One Must-Read Book

The War of Art by Steven Pressfield

Josh says this is a short book that he was able to read on the plane in a couple of hours, but it helped him stop making excuses for procrastinating things that were really difficult.

[spoiler title=’Transcript’ collapse_link=’true’]

Hi everyone, welcome to this week’s edition of Growth Everywhere, where we interview entrepreneurs and bring you business and personal growth tips. Today we have Josh Pigford from BareMetrics, which is called a valuable metrics dashboard that allows you to track things such as monthly recurring revenue, lifetime value, churn, net revenue, average revenue per user, and things like that. And it pulls directly from your Stripe account.

Josh, how are you?

Doing great man, thanks for having me on.

Thanks for being on the show. So I guess, why don’t we start off with your background first?

Sure. So I’ve been doing stuff on the web for a long time, probably, I don’t know, a decade or so. I started building stuff for myself like, as a kid in high school, like this is back in the geo cities days and stuff. That kind of moved into building stuff for other people. So initially, I started off like doing a bunch of design work for bands and things like that. Then that start of leading into me just wanting to build stuff again for myself, and figure out how I can earn money. So I’ve always had an entrepreneurial spirit I guess and that’s just over the past ten years has been what I’ve focused on. So for a long time, I split my time between building products for myself, and then for clients and then BareMetrics kind of took off and I’ve been able to focus on it 100% on it for the past, almost a year now.

Great. Let’s talk about BareMetrics. First of all, how did you come up with the idea and let’s talk aboutthe journey.

Sure. So, back in, this is I guess October of last year, so 2013, I had two other products, both kind of survey, online survey kind of industry and they both use stripe. I was trying to get those sort of, they’ve been around for a while and I needed to kind of give them a kick in the pants and see if I can make more money.

So I’ve been looking at how to get all these metrics and there just wasn’t an easy way. I mean I could do the whole manual spreadsheet kind of thing or try to hook them up into some other generic analytics tool but that all required me to not screw up like the implementation of how I’m sending them data and I wasn’t ever come through with that and so I research about stripe and see if stripe’s got the data and they do and I kind of built it for myself initially and then stuck it up there to see what will happen and it struck a chord.

Got it. And I noticed when Buffer put up their BareMetrics dashboard, that’s when people started, or at least I got kind of awareness of BareMetrics like I need to have this. So was that kind of a big accelerator for you guys? How did that affect you?

They did absolutely. I mean, like we have released iDashboard publicly in February, and that was sort the emphasis of the buffer deal, like that was sort of a business partnership. Obviously, there are much larger company than BareMetrics is and have a ton of people that follow them and so when they did that, it was like, if you look back at the chart like you see a permanent change in the angle of the revenue chart, like it changed the sort of trajectory on our growth and that was only a positive deal.

Got it. And what do revenues and users look like today?

We’re hovering close to 27,000 and month of recurring revenue which translates to like 325,000 annual rate. Number of users, it’s kind of anywhere between 280 and 300, as it depends.

[05:00:00] Got it. The company itself right now, how many people are on the team?

There’s six of us full time.

Wow. Okay great. I saw other of your presentations and things like that. You talked about having to, you like to build things, and now you’re starting to build more employees, you have six people, it’s going to get bigger and bigger. So, do you find yourself still pretty close to the product or you find yourself doing other things?

It’s an interesting start to be in, for sure. I spend a lot of time now on more sort of high level company stuff like where we have a company retreat next month. So it’s like, I spend a lot of time planning that. I do one on one’s with all the people that work on BareMetrics and so I spend a lot of time preparing and kind of looking over that stuff. There’s just a lot of more, administrative isn’t the word, but just kind of making sure everybody else is equipped to do their job well and then I just kind of just keep the ship headed in the right direction. I’m still really close to the product, for sure. But I’m not like designing and developing what I was doing the earlier days.

Got it. Now, walk us through the timeline. By month five, you went from pretty much zero dollars to $5,000. Tell us about that experience.

When I put BareMetrics out there, I really kind of have intended it to be just sort of like another tool in the toolbox. I’ve always been like somebody who’s juggling lots of different things at the same time and in hindsight, that was not a great idea and I don’t necessarily recommend that now. But in the way that my brain was working at that time was, okay, like I got a couple of products now that are making a few thousand bucks a month, like if I’m going to build this thing, maybe it can also make a few thousand and that collectively will make a decent amount of money. So when I put it out there and it took off quickly, I didn’t really know what to think of it, it was sort of like when is it going to stop growing, because I already not expected it for to get even in to that much. So within five months of forming the idea, actually four months after launching, it was at $5,000 a month and that would mean pretty good growth for like a one man show. I felt good about it then I’ve still just kind of been riding the roller coaster and see what happens.

Okay. Now how did you go about acquiring your first, let’s just say your first ten users?

That was all, surprisingly, twitter basically. That was a word of mouth and like the mode of that was twitter, the way that people are sharing it. I have a bunch of others, but isn’t a start up, and that was sort of like maybe the first couple of customers or just people that I knew who had companies. But after that was, I would share something on twitter about this thing, for sure, anybody else that use stripe, it kind of latch on to it, it struck a chord to them and then the people like stripe start sharing it and it kind of grows from there.

You talk about having to juggle different projects and you’ve always kind of done that. The product launch itself, how did that look? You presented it to the people in twitter, what else did you do that was kind of special with your product launch?

It’s so anticlimactic. I wish that I have done some like, here’s something, step by step 10 ways to launch a product. But in reality, I didn’t do anything. I didn’t collect email addresses and I have not been blogging about this prelaunch till it drum up, hype or anything. It was very was, I think what I want to say is, within like a month, I’m doing like a couple of thousand dollars a month in recurring revenue and it just kind of took off.

Got it. I think this is something that I’ve always wanted, a really cool dashboard. It’s something thatevery start up would want and it’s super simple to understand. That’s probably a big part of it. This is like a duh product.

You don’t always going to have a super cool product; you don’t need to buy like a product launch formula or something like that. Sometimes you can do the unsexy thing and watch it grow.

In reality, I think that’s the mistake that people get into. They get caught up in their own hype. They’re working on some product, they’ve got it in some like private data or prelaunch thing, [00:10:00] they get it in product thought and they collect all these email addresses and they look at that as, ‘oh I’ve validated the idea, people want this because I’ve got a thousand email addresses.’ But they haven’t charged anybody a dime and nobody has even actually seen the product and for some purpose, they might not even have a real functioning product yet. And so, they get caught up in thinking that they’re going to do well and then they’re going to release it and like it just flops. And nobody understands why. They spent so much time, feeling like they were headed on the right direction because they’ve collected a bunch of email addresses and turns out they just completely missed the point. So, getting it out there, I just wanted to get it out and I have no idea on how anybody would react to it. I have no idea if anybody would even pay for it. So, when people did start paying for it, I was able to get feedback from actual paying users and sort of make adjustments to the product from those people instead of just like prying this guy on numbers on the email list.

How long did it take you to build the actual product?

The first version was I set from many hours, it was like 7 days maybe. I mean that was prior 30 days, so like a month. So I had the idea on October 14th then I launched it November 14th. But I’m running two other side products and I’ve got clients and doing consulting working and junk. So, the first version was about 7 or 8 days of my time. And then, I actually, about two months in, completely scrap it and rebuilt it from scratch, again based on the feedback from these paying customers, these first paying customers.

So I’m assuming you’re full focus now is on BareMetrics. There’s no other like side projects and things like that?

Nope, so the previous side products that I had, I don’t have those anymore. I wrapped up. I had a couple of consulting client that I wrapped up back and I think January or February. So, Yup!

Yeah, it’s weird cause when people or entrepreneurs, they’re just starting out, they want to make something work, they want to “make it”, they’re always trying this different things, and the next shiny object, they’re going to latch on to it and they end up taking on too many things. So, walk us through the difference, the mindset difference now that you’re just focusing on one thing versus previously, you’re just doing all these different things.

Yeah! That’s a great question. Because a lot of times, I look at my juggling of things of different projects as almost like diverse of occasion of income or revenue. I’m not solely tied to one thing. So if that thing hits the fan, I’m not just out of money, basically. But in hindsight, that was sort of copped out. So, but now that I can focus on BareMetrics a hundred percent, the difference is that, you are able to think more clearly about idea and problem. Because I think so much, so many decisions for a product happen kind of subconsciously. Even talking about it in your sleep or you are like in the shower in the morning and something random pops in your head. It’s all about being able to sort of focus and not have a dozen things clouding, like taking your brain space. And I think the problem with trying to do too many things at once is you can’t just do that subconscious processing and coming up with like creative thinking about stuff basically. And so just the shift from juggling a handful of things to only one product is, it just changes the game. I was talking to a buddy of mine yesterday. He has products. He’s been juggling and super successful, series of books and things like that he’s had. And then he has had the software product on the side and been kind of like, ‘meh’, and he’s all of the sudden focusing on the software and not on the book sales stuff. And the software has taken off because he’s been able to focus a hundred percent on it. He’s not stretching himself so thin and he can think clearly about how or what problems need to be solved on that product.

It almost feels liberating in a way, right?

Sure, I agree and it can also be a little scary. If you go back to my thought process before having or the motivation being this, like revenue, diverse of occasions kind of thing. All my eggs are in one basket here. So, this hits the fan, and then we got problems. But at the same time, I’m not at a desperate point. It’s not like we’re tethering on if it’s working or not. It works. And it’s just a matter of making sure I don’t make any absolutely idiotic decisions at this point.

You talked about twitter helping you acquire your first ten users. [00:15:00] What’s one unique thing you’re doing today to acquire more customers?

So we do a lot of retargeting. We use perfect audience. So, we can drive a decent amount of traffic to the site either from search terms, a lot feels like searching from stripe analytics and then also just regular content. So in our content, the stuff that we are posting on the blog converts really well. It drives a lot of traffic but so, it’s like you got these content marketing sites, the blog and that drives a lot of traffic but then, we can retarget them after the fact. So, that also converts pretty well. It doesn’t demand things for getting new customers.

Perfect. You do mention somewhere that you’re against free trials. I want to preface by saying that, and you mention this as well, your product is obviously instantly understandable that the customer would want. But what about more complex tools like CRMs, or other tools. Should they have free trials?

I’m not necessarily opposed to free trials. I’m opposed to free trials, Okay, let me preface that again. Free trial may not be the right term. Free plans – I generally am opposed to. And that sort of a typical free plan like I think most companies have a free plan, give away way too much and they don’t need the free plan but they feel like they have to because that’s just what you do. And I think the problem, okay, there’s a couple of different ways to look at this. The free trial thing – the no credit card trial, if you get the CRM that takes a lot of work to get set up, and then yes, I’m cool with that because it’s a value thing. How long does it take to start getting value out of it? You should start paying when you start getting value. So with the CRM or any other sort of complex tool, it might take of weeks or months to start getting value out of it. And commencing people to pay for that before they start getting any value is a big asks. Bare Metrics, it connects to stripe account and you get value you’ve done. So that’s what we charged upfront. Now, that not does everyone like AB test, a bunch of different stuff in the future but right now, I’m super comfortable with the position we’re taking on it.

Yeah, I think that makes a lot of sense too. We called it a free plan or free premium or whatever, I’m generally against that too because it just makes everything harder in general. Then once you kind of strip it away, it’s a bad experience for the people that were on that plan. They start to hate you. I totally agree with that.

Now, you and Buffer, BareMetrics and Buffer, you guys kind of have this thing about transparency. Your business revolves around transparency. You mentioned that transparency does have its downsides. Can you talk about that?

So, there’s a few different ways that transparency can manifest itself in negative ways. And I think the biggest thing for us has been, I guess, I would call the Me-too businesses so people who, they can see all of our metrics. It’s clear how much money we are making, what our growth is like, what our churn is and all that kind of stuff. And somebody who hasn’t, like this sort of entrepreneur who’s never built anything before or never had any success or anything. It’s easy for them to say, “I want to do that too!”, “I can do that too!”, and then “Look! How profitable it is!”, “If I only make a couple of thousands from it, that’s great!” And so, there’s been this, I can probably rattle off to a dozen businesses or software product apps that cropped up in the past 6 months that are clear like are almost directly ripping us off – same design, layout, the whole thing. So, that kind of stuff has been probably the biggest, it’s an annoyance. And that’s what the downside to it. But then, also it opened up for some scrutiny. Potential customers might not, they might think, “That churn rate looks bad, that churn rate is going off, what’s wrong? Why are people leaving?” And they might not just sign up but at the same time, the pros outweigh the cons. So, I’m still happy with it.

Can you talk about some of those pros?

So the Pros, from the marketing perspective alone, things like the Buffer deal happening which dramatically changed our business, that would have not happen had I not initially made our numbers public. And just the fact like our dashboard get shared a ton, people are drawn to that. And then again, it keeps of driving new customers to us and that’s just always been, it’s sort of been this thing that people are happy that they love to talk about it, kind of show it off and especially other start-ups and that’s my market writers, start-ups and founders, they’re obsessed with like of kind of checking it with other people. So, it works often in that perspective.

Okay. You talked a little bit about how to price your products. How did you go about setting up pricing for BareMetrics?

So, I knew from past experience that what I did not want was a bunch of people on a single digit, $5 month plan, or even a $12 month plan. I wanted the average revenue per user on a monthly basis to be at least 50 bucks. So, to make that happen, that amount, that scale, I needed to sort of tip the scale towards more expensive plans. So, our cheapest plans is 29 bucks but then, it goes up to 79 then 149, 249 and there’s much enterprise level of stuff. And so, that was sort of the motivating factor for how I price, was knowing that I wanted to be at least $50 a month or more per customer. Because I kind of sell or segments you towards businesses that are legit as opposed to businesses that don’t have any money but can still tend to be really demanding. So, I can filter that out automatically by having more expensive plans. So, that was sort of how I came up with those. As far as the exact numbers, I just I kind of pull them off in there.

Okay. This can always be adjusted down the line. You just have to follow people in, right? Cool. Now, you also talked about how people will know or how people can’t know when their business is dying. Can you talk a little bit about that?

So, I think in this, absolutely from personal experience here that in my own sort of, I think, most people are not honest enough with themselves about when their business is just not a great idea. And it all comes down to what were you trying to get out of a business, right? I mean, maybe 500 bucks a month from that product is fine for you. That’s all you ever wanted to be. But if you’re trying to grow, something that you could live up off, just on the base level, I think there are just some things that you have to pay attention to, to be honest like if you’ll ever get to that point, or if it’s worth the effort to get to that point. Things like, if your user churn is over get 25%, so that’s monthly, that means in 4 months all of your users will have churned, unless you are replacing them at a faster rate. And you think like, “Oh, my gosh 25% churns you”, especially when bigger businesses should have sub 1% churn. But a surprising number of businesses do have that high of a churn and they don’t do or think anything about it. And in reality, if people are churning at that higher rate, you’re not correctly solving a problem for them. You might not be solving a problem for them at all. And so, you should probably rethink things. Things like, you’re a couple of years on working on a project and you’re only making a couple of thousand dollars a month. Again, that’s what the point. You’re not solving a big enough pain or you might not be charging enough. But at the end of the day, it’s sort of being honest like, it’s not supposed to be that hard. Yes, it’s slow but it shouldn’t be that difficult, if you’re really solving like a real tangible problem.

Got it. Based on your experience, how many years should someone, like go at it before giving up? Obviously, there’s so many different variables here but just at a very high level.

I mean, I think you would know really within, I knew within 30 days that I hit on something with BareMetrics. But I also think, it’s kind of hard to know it until you see it. I would say, I did not know it with the previous products I built. I just kind of assume like, “Just slow go and cool” and didn’t think else of it. But if you’re again like, say a year in and you just feel like having to fight for every single customer, you probably going to have to draw on board. It’s kind of in my head, that’s how I look at it.

Got it, make sense. With BareMetrics, given that it’s only been a little over a year, what’s one big struggle you’ve faced so far while growing the business?

I think early on, the biggest was sort of infrastructure scaling stuff. I can kind of hold my own for basic development stuff and that’s what I had done for a while and then I have never dealt with anything that was sort of having to process much data. I just don’t know how to scale that. From a pure knowledge dealing with servers and all that stuff, I had a lot of troubles. So, that was for probably 68 weeks there. I think maybe March, April, May somewhere around there this past year, I was staying up late every night just trying to put out fires. I wasn’t building anything new. It was just, Oh, my gosh! How do I keep the train from falling off the tracks? At that point, I brought on the first full time employee who is still with us. He’s a backend engineer so he saved my tail in a big way.

What’s one piece of advice you’d give to your 25 year old self?

25 year old self. Okay, I was talking about this with my wife, on the hindsight, there’s not a lot that I won’t change. I mean, I was always kind of looked at myself as sort of a lone ranger and kind of, in a egotistical way like, was probably the fact that I could do a lot myself. On a consulting basis, people would hire because I could do it all. I kind of handle the design, the frontend, the backend, the whole deal, like build them up a whole product from beginning till the end. And I was proud of that but in the hindsight, now that I’ve built a team around the product, that’s just so much nicer. I wish I had tried to build up a team around things a lot earlier on. Not necessarily talking, have co-founders kind of thing but this work a lot harder to get more people and on the project instead of trying to do that all by myself.

Now what’s one productivity hack you can share with the audience?

Productivity hack? Let me think here. Trying out to multitask I think. I’m guilty of that still but whenever I’m trying to juggle too many things, I am barely just dropping them all and don’t do a great job at all with any of them.

Perfect. I think that’s something all entrepreneurs are guilty of, like the ADB syndrome.

What’s one must-read book you’d recommend to the audience?

So, the book that I recommend to anybody, especially when they are like early on building kind of stuff is the War of Art by Steven Pressfield. It was massive for me to get over the, a lot of people are kind of end up making excuses for when you are not able to pull off things or you kind of procrastinate things that are really, really difficult. When does the fact that these are difficult, are the main sign that you should be doing them and it’s sort of a quick. I read it on a plane like in a couple of hours. So, it’s a good read.

Nice. I’ve heard good things about it. I think it’s on my Amazon wish list. So I think you might press me to actually buy it.

Disclaimer: As with any digital marketing campaign, your individual results may vary.

Josh Pigford
Baremetrics

Eric Siu (@ericosiu) is the CEO at Single Grain, a digital marketing agency that focuses on paid advertising and content marketing. He contributes regularly to Entrepreneur Magazine, Fast Company, Forbes and more.